HRA is a receipt in the hands of an employee and he pays rent out of his HRA received. The rent is one of the factors while determining the exemption u/s 10 (13A) of Income Tax Act. Thus, in the case of your brother, the HRA amount of Rs. 20K will be included in his salary income and thereafter exemption will be allowed as per the rent paid u/s 10(13A).
In the case of company leased accommodation, the company takes a residence on lease and pays rent directly to the landlord. Only the perquisite value will be added to the income of the employee and not the entire lease amount paid by the employer.
There will be only marginal difference in tax liability, whether it is HRA or company leased accommodation. In the case of your brother, the difference seems to be significant because of (a) the lease amount paid by the company is more than the HRA amount and (b) probably, your brother is paying rent to his own family members or paying rent less than the rent receipt submitted by him to his employer.
Your brother may opt for HRA instead of CLA, if he chooses to and normally employer will not have objection to this, unless the accommodation is owned by the company or the company desires to have its work force nearer to its place of operations or any other administrative reason.
Whether your brother receives HRA or CLA, there is no significant change in the tax liability. You may get it verified by using actual figures in the computation of his income. He can save taxes by claiming deductions under Chapter VIA as applicable to him.